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For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $1,980,000 $3,997,000 $3,946,000 Controllable margin 945,630 1,990,500 4,754,100 Average operating
For its three investment centers, Gerrard Company accumulates the following data:
I | II | III | ||||
Sales | $1,980,000 | $3,997,000 | $3,946,000 | |||
Controllable margin | 945,630 | 1,990,500 | 4,754,100 | |||
Average operating assets | 4,977,000 | 7,962,000 | 12,190,000 |
The centers expect the following changes in the next year: (I) increase sales 20%; (II) decrease costs $352,000; (III) decrease average operating assets $495,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 78%. (Round ROI to 1 decimal place, e.g. 1.5.)
I | II | III | ||||
The expected return on investment | % | % | % |
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